Online Retail's Killer Mobile App Hasn't Offed Anybody Yet

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Online Retail's Killer Mobile App Hasn't Offed Anybody Yet

A plethora of new mobile phone applications allow users to type in a code or snap a picture of a product to find out exactly how much their local retailer is gouging them for that tube of toothpaste.

They've been dubbed killer mobile apps because they would empower a buyer to get real-time pricing information from other vendors – including, perhaps, competing brick-and-mortar establishments displayed on a local Google map (Oh look! It's $5 cheaper right across the street!) and online sellers who would be happy to deliver it to your door cheaper, postage-free and without collecting any sales tax.

But while the Web 2.0 promise is tantalizing, these programs have a long way to go before they put anyone out of business.

Amazon's entry into the mobile space last week, for example, shows that while brick-and-mortar stores may see their business poached, online retailers have a few tricks at their disposal to protect the bottom line.

The Google Android phone's variable-focal-length camera has led developers at ShopSavvy and CompareEverywhere to create applications that can scan UPC bar codes and price shop with other retailers. The feature is exciting to consumers who want instant access to consumer info, and though the iPhone camera's lack of a macro lens prevents it from UPC scanning (except for those poor souls who haven't bought a ClariFi Case yet), applications like SaveBenji's,Slifter and Frucall compare products from mobile phones. Meanwhile, SnapTell lets users get price information from a picture of a product snapped in the wild.

The downside for retailers is notable, and according to ReadWriteWeb, a Michigan Target store informed a shopper scanning merchandise that the practice is against company policy. As it turns out, Target has no such policy, and a spokesperson told Wired.com that UPC scanning is an interesting technology that he had only heard about three days earlier.

That said, it could be very bad for business. Consumers buying online at rock bottom prices while standing inside a store is not an ideal retail situation. But there's little to be done about it. Brick and mortar stores can't start confiscating cell phones at the door.

However, online retailers can take some steps.

Amazon's new mobile application, for instance, is enticing consumers with an "Amazon Remembers" function that manually matches mobile phone photos of objects to products in the Amazon store available for purchase. And while Amazon does price comparisons with retailers like Target and Macy's, the company does not allow any other mobile application access to its functionality and product reviews.

"My program did use Amazon reviews, but after a month or so, Amazon disabled our web services account," says Kendall Gelner, developer of CheckOut SmartShop. "They don’t want any third parties to be listing their prices on a mobile phone."

An Amazon representative would not tell us if that policy would change anytime soon, but prohibitive policies like that could throw a wrench into the acquisition of online pricing information. Amazon clearly wants mobile consumers to purchase products through the Amazon store – but mobile applications could use Amazon's product reviews, and then send consumers through Amazon's checkout system to purchase products.

For now however, unlike brick-and-mortar stores, Amazon can simply write a caveat into how its digital content must be handled that prevents other parties from accessing it.

The complications of digital content handling is part of why these mobile applications will mean a slow death to retail stores, if they manage to survive.

The tech has a lot of bugs that have to be worked out.Many of the price comparisons in these apps are only between online retailers – the local data (and most useful information in this case if a consumer wants to walk over to a cheaper store) is spotty at best and the security and dependability of the mobile environment is still not high enough for many people to hand over their credit card information.

Amazon Remembers, for instance, is a lot more useful for electronics than other merchandise. It sent a link to the mouse we photographed in less than five minutes, but recognized a credit card when I submitted a photo of my wallet and tried to sell me a cardholder it had in stock.

In addition, privacy concerns could be problematic. It might be exciting to know that you can take a picture of a stranger on the subway to find out who makes his scarf and where you can buy it, but that stranger may not be so psyched about you taking his photograph.

The excitement over the new technology may eclipse the privacy concerns, but at least for now, retailers don't have to worry too much. Consumers in a store are usually there to make a purchase.

"What we’ve seen is that most people continue to buy in the retail space," says Cortis Clark, President of Sol Robots, developer of Save Benjis. "If they're at the retail store, it's currently inconvenient to buy from the phone. People are using it mostly for piece of mind."